By Philip Randerson, MD of technology executive search firm European Leaders
The rivalry between operators and emerging OTT players continues to intensify and stimulate debate. OTT companies continue to be heralded as innovative and disruptive players intent on challenging the status quo, while operators appear intent on a course of defensive self-preservation.
European Leaders chose to investigate the respective management Boards of the world’s 10 largest mobile operators by revenue and compare it to 10 of the most widely recognised OTT players to see if the above mind-set permeates through their senior leadership. The results were quite revealing.
Of the 119 board members that currently control the world’s top 10 mobile operators - 58 percent have a legal, financial or technical engineering background. Nearly half (46 percent) of these executives are focused on key financial and legal considerations that occupy the operator.
Nearly a quarter (24 percent) of these board members had not worked in senior positions outside of the mobile or telecoms industry.
In stark contrast, an analysis of the backgrounds of 81 people from 10 of the most prominent OTT players found 62 percent of board members are focused on sales, marketing, strategy and on-going business operations.
Moreover, almost a third (31 percent) of these directors are recognised market strategists, while just 12 percent are concerned with business finance matters.
The world’s largest OTT players have become synonymous with rapid and disruptive innovation. However, mobile operators are seen by many as companies with a conservative corporate culture that struggles to foster innovation. But is this a fair assessment of the personalities of these organisations?
The boards of operators and OTT players are certainly representative of the corporate paths they have trod.
When mobile operators launched into the market they had no competition. Their unique service proposition grew phenomenally popular with consumers, delivering operators vast success and strong businesses with very healthy margins. It was a service that became synonymous with convenience and practicality – it was a technology that sold itself.
The success of the technology in the early days stemmed from the pace in which networks and resulting service quality could scale – considerations for engineers, lawyers and financiers.
However, the situation could not have been more different when OTT players entered the market. They arrived in an age of advanced technology with access to the internet and cutting-edge mobile networks already in operation.
Unencumbered by owning their own network infrastructure, OTT players were, and are, able to roll out services rapidly and nimbly. Their service innovation focus has brought them great success. It’s not a coincidence that these companies have board level executives with greater diversity in skillset, most focused on strategy, marketing and sales.
The market environment that operators now have to compete in is an ecosystem that is very different to when they launched. Many operators continue to maintain defensive cultures and insularity causing them to fall further out of step with their OTT rivals that are better capturing consumer imaginations and revenues.
What is fundamentally clear from this study is how strongly senior leadership permeates throughout these organisations and the degree in which management Boards set the tone.
In order to compete effectively with their OTT rivals, operators must strike a balance between retaining required specialisms and maximising fresh thinking and new business models from emerging talent in new markets.
This is going to require operators to be braver and bolder, but it won’t involve a complete revolution. There will always be a requirement for operators to maximise the value of their core assets.
The secret to success will be their ability to monetise these assets in new and exciting ways - to move beyond the services they have always offered in order to capture new, and retain existing customers.
Operators that possess a breadth of new skills and capabilities will be better positioned to identify, and harness this new innovation and ensure their ongoing success.
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